AUD/USD Forecast: Navigating US Government Shutdown & Technical Signals

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This article is a follow up from the previous article on the Australian Dollar titled AUD/USD Forecast: Are Fresh Highs Incoming After RBA Rate Hold?

Is the Aussie Dollar Poised for Gains?

As discussed in the previous Australian Dollar article titled AUD/USD Forecast: Are Fresh Highs Incoming After RBA Rate Hold? The Aussie Dollar may be poised for a rally.

Since the interest rate decision by the RBA the Aussie Dollar has flattered to deceive. AUD/USD has faced a challenge given the US Dollars recent renaissance but that rally is likely to run out of steam soon in my opinion.

The fact that the RBA are holding rates and the Fed expected to cut bodes well for the AUD/USD pair to rise higher.

The US government shutdown appears to be benefitting the US Dollar at the moment and there is a possibility that this persists for a little while longer.

What this could mean for AUD/USD is that we could see a continued grind over the coming days and weeks until the US government shutdown ends and US data releases begin filtering through.

Commodity Rally to Benefit the Australian Dollar?

There is another factor to consider and that is the continued rally of commodity markets such as Gold, Silver and Copper. The Australian Dollar is considered a commodity currency and usually gains when the precious metal markets are on the rise.

This definitely adds weight to the theory that a rally for the Aussie Dollar may be in the offing. The technicals further support the idea for the AUD/USD to rally higher. Let us take a look at why.

Technical Analysis - AUD/USD

From a technical point of view, AUD/USD has been consolidating and edging lower over the last 6 or so trading days,

Having broken the bull flag pattern which was in play the pair looked poised for a rally but has since had a pullback to a key level of confluence.

The level/area in question around 0.6550-0.6500 houses the 50 and 10-day MAs. The daily candle also looks poised to close with a downside wick highlighting the potential buying pressure in this price zone.

If an upside rally does materialize, the measured move potential from the flag breakout is around 70 pips.

This would mean a potential retest for AUD/USD of the recent highs at around the 6685 handle.

A move beyond that level would bring the 0.6750 and 0.7000 psychological level into focus.

If AUD/USD pushes lower from here, immediate support rests at 0.6542, 0.6530 and 0.6500. A break below 0.6500 could open up a retest of the 200-day MA, which rests at the 0.6418 handle.

AUD/USD Daily Chart, October 8, 2025

Source:TradingView.com

Client Sentiment Data - AUD/USD

Looking at OANDA client sentiment data and market participants are Long on the AUD/USD with 60% of traders Net-Long. I prefer to take a contrarian view toward crowd sentiment and thus the fact that so many traders are Long means AUD/USD could fall in the near-term.

Follow Zain on Twitter/X for Additional Market News and Insights @zvawda

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